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Cost of Living Adjustments Released

27. October 2011 14:15

The IRS released the following 2012 cost of living adjustments (COLAs) pertaining to these benefits:

Qualified Transportation Fringe Benefits: For 2012, the monthly limit on the amount to be excluded from an employee's income for qualified parking benefits will be $240, a $10 increase from the 2011 limit. However, the temporary increase in the combined monthly limit for transit passes and commuter highway vehicle expenses that was in effect for 2011 has expired. Unless the increase is reinstated, the combined monthly limit for transit passes and commuter highway vehicle expenses reverts to $125 in 2012.

Dependent Care Assistance Plan (DCAPs): The $5,000/$2,500 DCAP limit remains unchanged as it is a non-indexed limit.

Archer MSAs: Although new Archer MSAs cannot be established after 2007, if a plan continues to administer such accounts the parameters for Archer MSA-compatible high deductible health coverage have increased. For self-only coverage, the annual deductible must not be less than $2,100 (up $50 from 2011), or more than $3,150 (up from $100 from 2011) with an out-of-pocket maximum of $4,200 (up $100 from 2011). For family coverage, the annual deductible must not be less than $4,200 (up from $100 from 2011), or more than $6,300 (up from $150 from 2011) with an out-of-pocket maximum of $7,650 (up from $150 from 2011).

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Federal Mandates


New Regulation Requires Health Plan Option Summary in 2012

31. August 2011 16:17

This month, the Departments of Labor and HHS proposed rules for the "uniform summary of coverage" that is required under PPACA. Heath insurers and group health plans (including grandfathered plans) must provide consumers with clear, consistent and comparable information about their health plan benefits and coverage beginning in 2012. Specifically, the proposed regulations provide rules implementing PPACA provisions that would ensure consumers have access to two forms that will help them understand and evaluate their health insurance choices.

These forms include:

  • A Summary of Benefits and Coverage
  • A uniform glossary of terms commonly used in health insurance coverage

Summary of Benefits and Coverage

The summary document will include the key features of the plan or coverage such as the covered benefits, cost-sharing provisions, and coverage limitations and exceptions. Consumers will receive the summary when shopping for coverage, enrolling in coverage at each new plan year, and within seven days of requesting a copy from a health insurance issuer or group health plan.

The Summary of Benefits and Coverage will also include a new, standardized health plan comparison tool called "Coverage Examples" that illustrate what proportion of care expenses a health insurance policy or plan would cover under common benefits scenarios. The Center for Consumer Information and Insurance Oversight (CCIIO) will provide standards for plans and issuers to simulate claims processing for each scenario so consumers can see an illustration of the coverage they get for their premium dollars under a plan.

Uniform Glossary of Terms

Under the proposed regulations, insurance terms will be the same across all plans. Insurance companies and group health plans will be required to make available a uniform glossary of terms used in health insurance coverage, for example "deductible" and "co-pay." This will allow an easier comparison of insurance plans, and the Departments of HHS and Labor will post the glossary on both www.HealthCare.gov and www.dol.gov/ebsa/healthreform/.

Click here to read the proposed regulations.

Click here to read the Model Summary of Coverage.

Click here to read the fact sheet.

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Federal Mandates | Health Reform


IRS Grants Automatic Extension for Filing Form 8928

8. July 2011 14:55
The IRS has finalized regulations to allow Form 8928 filers to obtain an automatic 6-month extension for filing the return. This form is used to report excise tax penalties for violations of COBRA, HIPAA and other group health plan mandates, as well as the Code’s requirements for comparable Archer MSA and HSA contributions.

The extension does not extend the time for payment of any tax associated that is due. Estimated excise taxes must be submitted by the return’s original due date and a separate Form 7004 must be submitted in order to obtain the automatic extension.

Click here to read more.

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HSAs | COBRA | HIPAA | Federal Mandates


Electronic Disclosure of Employee Benefit Plans

7. July 2011 14:33

The DOL is reviewing the use of electronic media to help determine whether and possibly how to expand or modify the current rules regarding the electronic distribution of employee benefit plan information. Plan information, such as quarterly account statements, is required to be disclosed under the Employee Retirement Income Security Act, which is enforced by the department’s Employee Benefits Security Administration. Comments were to be submitted on or before June 6, 2011.

For more information, click here.

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Federal Mandates


Standard Mileage Rate Increases

29. June 2011 14:13

The IRS has revised the optional standard mileage rates for operating an automobile for business, medical or moving expenses, resulting from the recent increases in gas prices.

Effective July 1, 2011, the new rates will increase by 4.5 cents to 55.5 cents per mile for business expenses, and 23.5 cents for automobile use related to medical or moving purposes. Charitable contribution related mileage remains fixed at 14 cents.

Click here to read Announcement 2011-40.

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Federal Mandates


Amended Regulations on Claims and Appeals and External Review Procedures

24. June 2011 15:05

The DOL, HHS and IRS have jointly issued amendments to the interim final regulations on internal claims and appeals requirements and external review procedures. Among other things, these regulations offer a transition period to allow time for issuers and plans to make a reasonable transition to implement external review processes. Specifically, under an amendment to the July 2010 regulations being published contemporaneously with this technical guidance, the transition period is modified to extend through Dec. 31, 2011. HHS intends to issue determinations regarding state external review implementation no later than July 31, 2011. The agencies have also issued revised model notices as part of the new technical release guidance on state and federal external review procedures.

Click here to read Technical Release 2011-02.

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Federal Mandates | Health Reform


Penalties for Failure to Comply with Nondiscrimination Rules

23. June 2011 08:38

In 2011, PPACA will prohibit insured group health plans from discriminating in favor of highly compensated individuals regarding eligibility and benefits. These rules are already in place for self-insured plans.

The PPACA penalties imposed for failure to comply with nondiscrimination rules related to insured health plans are different than the penalties related to noncompliance with the rules related to self-funded health plans. If an insured group health plan fails to comply with the nondiscrimination rules, the employer/plan sponsor is subject to a penalty of $100 per day for each participant not receiving the discriminatory benefit, whereas under the self-funded plan rules highly compensated individuals in a discriminatory self-funded plan are taxed on medical expenses actually paid.

In December, the IRS delayed the effective date for compliance and enforcement of this provision of PPACA until the definition of discriminatory benefits in a group health plan can be clarified, and additional regulations or administrative guidance is released.

Click here to read Notice 2011-1.

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Federal Mandates | Health Reform


Breast Pumps and Lactation Supplies Will Qualify as Medical Care Expenses

14. February 2011 11:15

The IRS has concluded that breast pumps and lactation supplies will qualify as medical care expenses under Code Section 213(d) because they are for the purpose of affecting a structure or function of the lactating woman’s body. Therefore, these items will qualify for tax-free reimbursement from a health FSA or HRA, or for a tax-free distribution from an HSA. The IRS will revise Publication 502 to include this new information.

 

Click here to read IRS Announcement 2011-14.

 

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FSAs | HRAs | HSAs | Federal Mandates


Judge Rejects Health Law

2. February 2011 11:10
A Florida federal judge ruled the Patient Protection and Affordable Care Act as unconstitutional and the entire law "must be declared void." U.S. District Court Judge Roger Vinson ruled on Monday that it was unconstitutional for Congress to enact a health care law that required Americans to obtain commercial insurance. Twenty-five other states have joined the suit as plaintiffs.

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Federal Mandates | Health Reform


2011 Medical Mileage Rates

10. December 2010 11:50

The IRS announced the 2011 standard mileage rates for taxpayers to be reimbursed for the costs of operating an automobile for business, charitable, medical or moving expenses. The rate for use of a vehicle to obtain medical care will be 19 cents per mile, which is a 2.5 cent increase from the 2010 rate.

The same increased rate will apply for use of an automobile as part of moving expenses that are deductible under Code Section 217. Parking fees and tolls related to the use of an automobile for medical or moving expense purposes, however, may be deductible as separate items.

 

Click here to read the notice.

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Federal Mandates


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